Strategic Sourcing Vs Outsourcing for ICT Projects

Strategic sourcing is finding acceptance as a better way to approach ICT (Information and Communications Technology) services in public sector than the traditional outsourcing contracts. The benefits of the former method have overtaken the latter in a variety of ways proving that strategic sourcing of ICT services is here to stay.

This is the core message contained in the guide from Socitm titled ‘Planting the Flag- Pocket guide 4: Strategic sourcing’ released in November 28. Socitm is an association of professionals from public sector ICT as well as digital fields.

The guide, Pocket guide 4: Strategic sourcing, was published by Socitm during a dire period for the public sector outsourcing. There were several instances of failed outsourcing contracts for the public sector. Numerous major services had to be brought back in-house during this period too. These instances prove that public sector has a lot to learn about outsourcing and also how to procure and manage large-scale deals for outsourcing in a profitable manner. This indicates a shift that has to be adopted towards strategic sourcing of ICT projects.

What is strategic sourcing of ICT services?

Strategic sourcing of ICT projects aims at finding the best mix of different organizations including local public, private sector and voluntary organizations. Through these organizations, services will be delivered by means of a range of tools and devices right from informal agreements in the service level to full-fledged formal contracts. According to the guide, these services never come in discrete packages meant only for a particular supplier.

The potential suppliers for the strategic sourcing of ICT services may consist of:

An individual public sector organization which provides services on a commercial basis to other areas of the same sector.

Third sector or voluntary organizations.

Collaborative partnerships.

The community itself along with commercial suppliers which includes even SMEs (small and medium-sized enterprises).

Benefits of strategic sourcing of ICT projects

Strategic sourcing takes into account the fact that organizations involved in outsourcing will have certain legitimate interest and also that the requirements for a project can change with time. As such, strategically sourcing the projects will benefit the organizations in a number of ways.

Flexibility is the core of strategic sourcing of ICT projects as compared to traditional outsourcing contracts that go on for years. The flexible nature allows the sourcing to be adjusted depending on the requirements or interests of the company.

Socitm says that strategic sourcing will provide ample profit opportunities to private sector organizations. However, the traditional outsourcing method overlooks less tangible benefits like an improved access to a particular market. Strategic sourcing takes into account these benefits too.

Strategic sourcing will render useless the huge volumes of requirement specifications and other conditions in contracts which might have otherwise led to disputes. By doing away with such things, strategic sourcing ensures harmonious service delivery with immense scope for change.

The service environment is a turbulent one with technology changing everyday. As such, the power of traditional outsourcing contracts to freeze the current model applied in service delivery can prove to be troublesome.

Also, from a traditional outsourcing point of view, there are many possibilities. Suppliers might expect unrealistic growth or expect high charges from the clients. Clients cannot assume that the business bid of the suppliers is always viable. Nor will they be in the client’s best interest always. Strategic sourcing helps clients keep the control in their hands thereby not compromising on success.

The benefits of strategic sourcing of ITC projects in the public sector have been showing prominently wherever it has been applied. With increased adoption of strategic sourcing as opposed to traditional outsourcing, a large number of projects can be saved and executed successfully.

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